Voluntary tax scheme: LHC wants to know about cabinet approval

LAHORE: The Lahore High Court on Wednesday directed the federal government to inform it whether cabinet’s approval had been accorded before the Voluntary Tax Compliance Scheme (VTCS) was passed by parliament in 2016.

Earlier, Advocate Sheraz Zaka argued that the tax amnesty scheme should be declared discriminatory as it was exclusively meant for traders. It excluded lawyers, doctors and other professionals. He said the scheme was launched to provide a cushion to traders for ‘whitening’ their money.

The petitioner-lawyer further contended that exempting traders from audit and filing of wealth statement was also unjustified, whereas a common citizen had to file wealth statement and also was not exempt from audit. He said the ‘discriminatory’ amnesty scheme was a reflection of dysfunctional affairs of the Federal Board of Revenue (FBR).

Advocate Zaka argued that the Supreme Court in its several judgments had declared the approval from the cabinet mandatory before introduction of any such scheme. He asked the court to strike down the scheme for being unconstitutional.

Justice Shahid Karim adjourned further hearing for three weeks and asked a federal law officer to apprise it of cabinet’s approval for the scheme.

On previous hearing, the Federal Law Ministry had told the court that the scheme was introduced to bring non-filers in tax net for the achievement of broader national objectives. It said the intention of introducing the scheme was to broaden the tax base and encourage those non-filers who were forthcoming in expanding the tax base of the country, which was dismally low.